Daily Progress, Jacksonville, TX


April 16, 2013

Bankrupt Lon Morris College still owes large utility bills

JACKSONVILLE — It would seem nobody's home but the lights are still on at Lon Morris College.

At least, those lights remained on until this month. The college owes a bill of nearly $12,000 to Reliant Energy Retail Service for that electricity, and Federal Bankruptcy Judge Bill Parker has set a hearing this week in the hopes of resolving the issue.

That's not all, either. The LMC bankruptcy estate still owes the city of Jacksonville $25,600 in unpaid water bills.

As far as the electricity issue is concerned, LMC Plan Agent Dawn Ragan has attempted in court filings to convince the judge a hearing is not necessary.

“The trustee acknowledges a debt to Reliant  for electricity supplied post petition,” Ragan asserted in the documents. “However, the trust has not yet reconciled its books and cannot agree it owes Reliant the entire claimed administrative expense of $11,918.35. A hearing is not necessary at this time.”

But Parker, apparently, begged to differ and has set the electricity-related hearing for 2 p.m. Thursday in his court.

According to court documents, the college entered into this electricity sales agreement with Reliant on Feb. 23, 2011 for unspecified reasons.

The company agreed to provide electricity to 31 Lon Morris properties from March 1, 2011 until December 31, 2013, at “a fixed rate per kilowatt-hour, plus applicable fees and charges,” court records show.

As part of the arrangement, Reliant also agreed to provide electricity to five additional LMC-related properties between Jan, 1, 2012 and Dec. 31, 2013.

When the bankruptcy proceedings started to affect cash flow, LMC filed an  emergency motion to prohibit utility companies from stopping service to college properties. It was granted and LMC supplied Reliant with a $5,000 “assurance deposit.”

But as of March 18, Lon Morris owed Reliant the entire $11,918.35, court records show.

As far as the city of Jacksonville is concerned, it is owed $25,600 for a very delinquent water bill,  City Manager Mo Raissi said.

Raissi said city officials were hesitant to cut off the water when the bill started growing delinquent because they were concerned about the health implications and the ultimate effect it might have on the college.

 “We really don't know what portion of that we're going to get back — if any,” Raissi said Monday. “But according to the books they still owe us.”

Former Lon Morris College faculty and staff also report they have not received their full compensation.

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